Tablet PC Makers Bet on Lower Prices

      September 06, 2011 07:18

      The focus of the tablet PC market is shifting from high-performance functionality to lower prices. Global manufactures like Samsung and Motorola, which have released products in a similar price range to that of Apple's iPad, are now attempting to lure customers by undercutting their main rivals.

      ◆ Cut-price Tablet PCs

      Vizio, a U.S. manufacture of lower-end TV sets, released its 8-inch VTAB1008 last month for US$299 ($1=W1,070), some $100 cheaper than other tablet PCs of a similar size. The main drawbacks of the device are its bulky size and outdated operating system -- it is far thicker than the iPad and Galaxy Tab 10.1 -- but it is still flying off shelves in the U.S.

      Meanwhile, Taiwan-based Acer's Iconia Tab A500, which has a 10-inch screen, is selling for $374, much cheaper than its original price of $449. Additionally, Motorola has slashed the price of its tablet PC Xoom, from $499 to $439, while Samsung is offering its 7-inch Galaxy Tab for $279.

      Discounts abound for the smart shopper.

      ◆ Price War Heating up

      The price war was touched off by Hewlett-Packard, which will be withdrawing from the market. Upon announcing its withdrawal, the company offered its TouchPads valued at $499 for a bargain-basement price of $99.

      Bargain-hunters stood in long lines before retailers and the product was quickly sold out online. Consequently, HP decided Tuesday (local time) to crank out one last run of the gadget to meet unfulfilled demand.

      The price war is likely to peak in the fourth quarter of the year. Amazon is reportedly readying to launch a tablet PC for $250 in October. The company knows it will see a drop in immediate profits but is expecting to offset these with strong sales of its e-books.

      An insider at a domestic manufacturer attributed the low-price strategy to a lack of differentiation among products. Except for the iPad, most tablet PCs on the shelves run on the Android operating system. As such, they offer little variety or novelty in terms of user experience. This has led manufactures to turn to cheaper models with limited functionality.

      "As low-end tablet PCs are flooding the market, companies like Samsung that focus on high-end products are inevitably being affected," said Ha Joon-doo, senior analyst with Shinhan Investment Corporation. Strategies that differentiate products by displaying their advanced technology are necessary to ensure sales are not negatively affected, he added.

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